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Business Last Updated: Jun 12, 2019 - 11:31:09 AM


Is the IRS In Trouble?
By Newsweek 10/6/19
Jun 11, 2019 - 11:10:40 AM

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The Internal Revenue Service is suffering from a shrinking staff resulting in less enforcement and fewer audits, according to a report published by the agency late last month.

The IRS has in recent years decreased audits, criminal investigations and levies mostly on large corporations, pass-through business, and high-income individuals, an analysis of the report found.

The Tax Policy Center went through the statistics provided in the 80-page IRS report and found that between 2010 and 2018 the budget of the IRS dropped significantly before being adjusted for inflation, from $12.4 billion to $11.7 billion. The agency’s enforcement budget also fell to $4.7 billion in fiscal year 2018 from $5.5 billion in 2010. Staffing at the agency dropped 22 percent during the same period, and enforcement-specific staff dropped by more than 30 percent.

Audits are down 10 percent from last year, and down 42 percent since 2010. The majority of the cuts in these audits impact high-earning filers and corporations. Filers who made less than $25,000 had a higher chance of being audited last year than those making between $250,000 and $500,000.

Between 2010 and 2018 the number of corporate audits fell by nearly 50 percent. The IRS collected $3 trillion in revenue in 2018, but only 7 percent of that came from corporations, the lowest proportion since 1960.

A University of Michigan study found that top earners hide about $50 billion a year from the IRS, and without investigations or proper audits that money remains untaxed. Instead the areas with the highest numbers of audits per year tend to be in low-income, African-American communities in the South.

President Donald Trump, a self-proclaimed billionaire, recently bragged about hiding money from the IRS and avoiding paying taxes “for sport.” He said he purposely reported losses of $1.17 billion to avoid giving the federal government revenue on it.

“Real estate developers in the 1980’s & 1990’s, more than 30 years ago, were entitled to massive write offs and depreciation which would, if one was actively building, show losses and tax losses in almost all cases. Much was non monetary. Sometimes considered “tax shelter,” he wrote on Twitter. “You would get it by building, or even buying. You always wanted to show losses for tax purposes....almost all real estate developers did - and often re-negotiate with banks, it was sport.”

The president refuses to release his own tax returns, and claims that he can’t do it because he is under audit. There is no rule or law preventing him from doing so.


Source:Ocnus.net 2019

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